The flagship fund of Ken Griffin's Citadel gained 5.9 per cent in July after acquiring billions of dollars of AI stocks from Leopold Aschenbrenner's troubled hedge fund Situational Awareness. The US hedge fund giant, managing over $71bn, saw its Wellington fund surge 12 per cent in 2026 following a turbulent July marked by a sharp pullback in AI-related equities. After massive gains earlier in the year, hedge funds faced significant losses as stocks like SK Hynix tumbled nearly 50 per cent from June peaks. The tech-heavy Nasdaq 100 briefly entered correction territory before Citadel's acquisition of Situational Awareness's book.

Aschenbrenner's firm, which had gained over 400 per cent in the first half with leveraged AI bets, was severely impacted by the sell-off, forcing it to liquidate its public equity positions to Citadel in under 24 hours. Citadel competed with Jane Street and Millennium for the purchase, ultimately winning with a 10 per cent discount.

Market observers noted that Citadel's intervention helped stem the broader market rout, as Situational Awareness's forced selling had exacerbated the AI stock sell-off. Several of Aschenbrenner's major holdings, including Sandisk, rallied post-acquisition. This move exemplifies Griffin's strategy of capitalizing on distressed assets during market turmoil.